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Residential
The 3 Most Effective Ways to Find Commercial Space Tenants
It's not always easy to find commercial tenants.
The right tenant is valuable, but the wrong tenant can spend your time, energy, and resources.
Of course, depending on how creative you are, there are many different ways to discover businesses to lease space to, but these are the three that have found to be the most productive on my properties.
For some property owners, finding tenants and leasing commercial space can be a time-consuming process. Especially if you don't invest full-time.
It can be a tough job.
Handling incoming phone calls, sorting those fewer possibilities, and going on-site tour after site tour - and that's all before the negotiations begin.
Commercial real estate, unlike residential real estate, lacks a centralized listing resource
While some of these online tools are beneficial, they frequently populate your listing with false information, the platform can be difficult to use, and you must pay to play if you want to get any movement.
So, how do you find tenants for your commercial space?
Although there isn't a centralized database where you can readily publish your commercial real estate listings, you do have a few possibilities.
Here are the three most effective ways to find commercial tenants.
- Hire A Commercial Real Estate Brokerage
This is by far the simplest and most effective method of finding tenants. Simply contact a commercial real estate broker to take care of it!
Commercial real estate brokerages specialize in the leasing and sale of commercial real estates, such as office, retail, and industrial space.
Because commercial real estate lacks a listing database, brokers are the best source for learning which businesses are now looking for a new location and which may need to relocate soon. They keep in touch with business owners, property management companies, and other brokers regularly to keep up with what's going on in their market.
Commercial real estate brokers give you a legal duty to act in your best interests, and their fees are based on a percentage of the overall lease value, so you won't have to pay them until you receive a completely signed lease.
You can also set up these installments so that you don't have to pay them until you get reimbursed. The most usual method is to pay half of the commission at lease execution after collecting the first month's rent and security deposit, and the other half at rent beginning - this won't completely eliminate your out-of-pocket expenses, but it will assist. The other option is to pay a percentage of the monthly rents received, however, most brokers will increase their charge in this case because they will be paid over a prolonged period.
Your landlord agent broker, in addition to your commercial attorney, will be your professional consultant throughout the leasing process. Not only can they assist you in finding a tenant, but they can also help you negotiate your letter of intent (saving you money on attorney fees), coordinate any vendors you'll need, such as contractors and architects, and assist you in lease negotiations so you know you're getting the best deal possible.
Now, unless your commercial real estate broker also has a law degree, they cannot provide you legal advice, but they do know what is normal in the market because they deal with it every day, so they can advise about whether or not adjustments are required.
Landlords that engage brokers to lease their space usually discover better tenants and get better deals.
- List Your Space Online
You may not need a broker to assist you to find a tenant if you're planning to buy a piece of property or are preparing for an approaching vacancy.
Maybe you're just getting started on putting up a proposal and want to understand what market rates and terms are.
CBRE, JLL, and LoopNet are all good places to start scratching the surface and familiarizing yourself with the market so you at least know what you're looking at.
Sure, these web tools may not have the widest reach, and you'll almost certainly be dealing with some unsophisticated and low-quality leads, but you never know what you'll find.
These platforms do allow tenants to search by product type (such as office or retail), total square footage available, and other minor details like loading docks, ceiling height, or access, so as long as you provide as much information as possible when listing your property, you should only receive targeted prospects.
You might be able to find a commercial real estate broker who specializes in the neighbourhood or area where your property is located as a great side effect of using these web platforms.
They're getting calls about other houses in the neighbourhood from tenants who might not be a good fit for those but might be a good fit for yours.
3. Place High-Quality Signage on the Property
That's right, you should actually hang a poster in the window.
And not just any sign will do; you must be very precise with the information on the sign-in order to fine-tune your targeting.
Don't just grab a "for lease" sign from Stores with a number underneath it.
Those signs are hardly visible, are very small, and do not give off a professional vibe.
And believe me when I say that tenants are concerned about their landlord's professionalism. Many of them have had unpleasant landlord experiences before and are hesitant to do so again.
Feel free to include details about the space on the sign, such as its size and type, or whatever else you think is important. However, keep in mind that you won't be able to use that sign on any other properties.
Not able to lease out your commercial space?
Talk to us today and we'll be able to provide you with the most accurate advice possible.
